FERC just issued Order 841 requiring RTOs and ISOs to allow energy storage resources to participate in wholesale markets. This is huge for our commercial and industrial clients who are looking at battery systems. The order requires market operators to establish participation models that recognize storage can both consume and inject energy. Wisconsin Electric has already started talking about new tariff structures to accommodate behind-the-meter storage. Anyone have clients asking about this yet?
New FERC Order 841 - Energy Storage Participation Rules
Avista up here in Washington has been ahead of the curve on this. They've had a pilot program for battery storage since 2016 under Schedule 120. The challenge is the interconnection process - it's still taking 6-9 months even for small 500kW systems. FERC Order 841 is great in theory, but the implementation is going to be messy.
Xcel Energy in Colorado just filed their compliance plan with FERC last week. They're proposing a new "Storage Integration Tariff" that would allow customers to net out consumption and injection on a 15-minute basis. The monthly fee is only $50 but there's a $5,000 interconnection study required for anything over 100kW. Still cheaper than California though.
CenterPoint Energy down here in Texas is being much more aggressive. They want to charge a monthly "grid services fee" of $15/kW for any storage system that can export to the grid. They're claiming storage creates voltage regulation issues and increases O&M costs. It's complete nonsense - they're just trying to protect their generation revenue.
PPL here in Pennsylvania is taking a wait-and-see approach. They've told us informally that they don't expect significant storage deployment until battery costs drop another 30-40%. But PJM is already working on their compliance filing and it looks like they'll allow full participation by 2020. The revenue opportunities could be substantial - frequency regulation payments alone are running $30-40/kW-month.
Georgia Power just released their integrated resource plan and they're projecting 2,000MW of utility-scale storage by 2025. But they're also proposing new standby charges for customers with storage that can island. They want $8/kW monthly for the "reliability service" even if the customer never actually islands. We're preparing comments to oppose this.
The Wisconsin PSC just opened a generic docket to address storage interconnection standards. WE Energies is pushing for expensive utility-grade protection equipment even for small commercial systems. A 200kW battery system could require $25,000 in additional protective relaying under their proposal. This is exactly the kind of barrier FERC was trying to eliminate.
Otter Tail Power up here in North Dakota doesn't even have a storage interconnection process yet. They told one of my clients to "call us when you're ready to install and we'll figure it out." That's not exactly the market certainty FERC was hoping to create. The smaller utilities are definitely going to struggle with implementation.
Idaho Power actually has one of the better storage programs. Their Schedule 84 allows net metering for storage systems up to 100kW with minimal interconnection fees. The key is they treat storage discharge the same as solar generation - full retail rate credit during peak hours. It's probably not sustainable long-term, but it's great for early adopters.
ComEd in Illinois just announced they'll have their FERC compliance filing ready by the December deadline. They're working with PJM to develop standardized interconnection procedures for storage. The good news is Illinois just passed legislation requiring utilities to procure 1,000MW of storage by 2030, so there's real political support for making this work.
Pacific Power in Oregon is being really innovative with their storage approach. They're offering a "Virtual Power Plant" program where they can dispatch customer storage systems during peak periods in exchange for monthly payments. Early participants are getting $40-60/kW per month. It's voluntary now but I expect it to become mandatory as storage penetration increases.